XCel Test Life & Health

S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?

$50,000

All of these statements concerning Settlement Options are true, EXCEPT:

Only the beneficiary may select

What type of life insurance are credit policies issued as?

Term

When applied to Whole Life insurance, the word "straight" denotes:

The duration of premium payments

All of these statements about Equity Indexed Life Insurance are correct, EXCEPT:

The premiums can be lowered or raised, based on investment performance

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

Variable Life

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?

Variable Universal Life

A Return of Premium life insurance policy is

Whole life and Increasing term

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

20-Pay Life accumulates cash value faster than Straight Life

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death, EXCEPT:

Interest Only

N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?

Claim will be denied

Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?

Collateral Assignment

When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?

Void the policy only if it is discovered during the Contestable period and proven to be material

When is the face amount of a Whole Life policy paid?

When the insured dies or at the policy's maturity date, whichever happens first

A life insurance policy that provides a policyowner with cash value along with a level face amount is called:

Whole Life

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the:

policy proceeds

The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is:

the cost

Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled?

Payor Clause

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision

Payor provision

Under a Renewable Term policy,

the renewal premium is calculated on the basis of the insured's attained age

Term insurance has which of the following characteristics?

Expires at the end of the policy

P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?

Accidental Death and Dismemberment clause

How long does the coverage normally remain on a limited-pay life policy?

Age 100

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

Decreasing term policy

N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot?

Exclusion

What type of insurance offers permanent life coverage with premiums that are payable for life?

Whole Life

When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?

at future dates specified in the contract with no evidence of insurability required

What action will an insurer take if an interest payment on a policy loan is not made on time?

automatically add the amount of interest due to the loan balance

Variable Whole Life Insurance can be described as:

both an insurance and securities product

All of these are characteristics of an Adjustable Life policy, EXCEPT:

face amount can be adjusted using policy dividends

T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?

$50,000

P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?

$50,000 minus any outstanding policy loans

J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?

20-Pay Life

The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n):

Accidental Death and Dismemberment rider (AD & D)

M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain at $70,000 throughout the life of the policy. The type of policy that M has purchased is:

Modified Premiums Life

Which of these statements describe a Modified Endowment Contract (MEC)?

Falls below the minimum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract

An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?

Full face amount minus any past due premiums

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?

Modified Whole Life

Which of the following statements is CORRECT about accelerated death benefits?

Must have a teminal illness to qualify

A policy that becomes a Modified Endowment Contract (MEC):

will loose many of its tax advantages

A policy that becomes a Modified Endowment Contract (MEC):

will lose many of its tax advantages